CAB38-23 — Page 135

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opinion, would not be forthcoming by the payment of a subsidy to Great Britain, to use as Great Britain may determine.

(b.) Sound Strategy.-In this I include some provision for advice to Australia and New Zealand, which would so direct their efforts in acquiring or constructing ships of war that the unit of one would fit in with the unit of the other, or that the units of both would fit in with any Imperial Squadron when concentration took place. This would avoid waste. Further, I include in sound strategy a definite understanding that all units in the Southern Pacific, including the British unit in China waters, should concentrate for manœuvre purposes in peace time: and that they should all be at the disposal of the Admiralty in case of war or if war were imminent.

Australia, in utilising the first principle, has adopted what I believe to be, both with regard to ships and men, a permanent policy, and has made such progress that the Australian unit alone will be more effective than the Australasian Squadron which it replaces; and in doing this Australia has, to a very large extent, given relief to the Mother Country.

For the next year or two New Zealand can do but little in acquiring ships of her own, but some provision must be made to enable us to carry on the policy already in existence, namely, the train- ing of our men for the Navy. Your suggestion enables this to be done, but I should be glad of your advice as to this training. To me the present arrangement is not satisfactory, and I would like to be in a position to report to the New Zealand Cabinet what the Admiralty con- siders ought to be done to produce the efficient sailor, and, in process of time, the higher ratings and officers. I see no prospect of training officers ourselves for some time to come, but there is available to us the recently established Naval College in Australia, and, if the Admiralty would accept the training there for entry into the Imperial Navy, we could utilise that institution and at the same time help our Australian neigh- bours. Can this be agreed to, or, in case this is not possible, can you offer a larger number of naval cadetships to New Zealand?

Then, in deference to New Zealand national sentiment, which I hope to see further developed, will you extend your generous offer of the

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